The Reserve Bank of India Governor Shaktikanta Das said in a post-monetary policy press conference that the Indian economy is an island of growth and macroeconomic stability. There are signs that the CPI has peaked, and it is expected to moderate in Q4FY23 & Q1FY24.
Addressing the media, RBI Governor Shaktikatna Das said that inflation still remains at uncomfortably high levels and there are some uncertainties or outlook to inflation. The RBI is bringing down excess liquidity in the system and the CAD is expected to remain within manageable limits.
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He further said that 50 bps has become a new normal and the focus will remain on a soft landing of the economy
The RBI Governor on Friday announced that the Monetary Policy Committee voted unanimously to hike the benchmark interest rate by 50 basis points (bps) to 5.4% with immediate effect. The Standing Deposit Facility (SDF) rate is adjusted to 5.15%. The Marginal Standing Facility (MSF) and bank rate are revised at 5.65%.
The RBI Policy stance is retained at Withdrawal of Accommodation. The repo rate is back to the pre-pandemic levels, highest since August 2019.
The MPC has retained the Consumer Price Index (CPI) Inflation projection for FY23 at 6.7%. The second quarter CPI is seen at 7.1% compared to 7.4% previously, while Q3 CPI is seen at 6.4% against 6.2% projected earlier. The Q4 CPI projection is retained at 5.8%. The Q1FY24 CPI is seen at 5%.
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The Real GDP growth projection for FY23 retained at 7.2% with Q1 at 16.2%, Q2 at 6.2%, Q3 at 4.1% and Q4 at 4% with risks broadly balanced. The real GDP growth for Q1 FY24 is projected at 6.7% said RBI Governor Shaktikanta Das.
Foreign Direct Investment (FDI) improved to 13.6 billion dollars in the first quarter of the current financial year as compared to 11.6 billion dollars in the first quarter of last year said Das.